The San Jose City Council called Tuesday for more aggressive efforts to stay on top of debt collection, even as it voted unanimously to officially write off nearly $3.5 million in unpaid bills.

Council members struggling to close multimillion-dollar deficits seemed taken aback by the list of more than 200 debtors who owe the city anywhere from $5,000 to more than $90,000. Some of the debts are nearly 20 years old.

“It’s great that you’re still trying to collect after all these years,” Councilwoman Nancy Pyle said. “I just smell a problem with the process.”

The council voted to hire two collection agencies and asked for a yearly update on debt collections. Noting that some of the debtor companies are still doing business with the city, the council also said unpaid bills should be settled during contract renewal.

San Jose is owed a total of about $21 million from about 8,000 individuals and businesses, arising from unpaid fees, taxes and rent or damage to city property. City officials hope the two collection agencies, which will be paid a portion of recovered debt, will help the debtors find their checkbooks.

Finance Director Scott Johnson said the city fell behind in its collection efforts due to limited staffing and difficulty extracting records from an outdated computer system at the old city hall. He said he has made it a priority over the past year to stay on top of collections.

Johnson said the city will still try to collect as much of the $3.5 million written off as bad debt as possible, but he expects to recover no more than 2 percent of it. The debts are being written off either because they are so old they may not be legally enforceable or those who owe them are bankrupt, have no assets or cannot be found.

Unpaid bills weren’t the only surprises lurking in city files – the city has more than 12,000 yet-unidentified pieces of land that could be sold or leased. The council Tuesday approved a public-outreach procedure for selling or leasing unused property, which city officials hope will garner much-needed revenue.

And to cut costs, the council also called for exploring ways to pass on credit card fees to those who use plastic to pay for everything from sewage bills to swimming lessons.

John Woolfolk is a reporter for the Bay Area News Group, based at The Mercury News. A native of New Orleans, he grew up near San Jose. He is a graduate of the UC Berkeley School of Journalism and has been a journalist since 1990, covering cities, counties, law enforcement, courts and other general news. He also has worked as an editor since 2013.

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